The world of Vitamins

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2 The world of Vitamins A presentation by Steve Watts 8 th September 2014

3 What are Vitamins? Any of a group of organic compounds which are essential for normal growth and nutrition and are required in small quantities in the diet because they cannot be synthesized in the body. Or, more simply... Vitamins are organic compounds which are needed in small quantities to sustain life

4 What role do Vitamins perform? Vitamins have diverse biochemical functions Some such as Vitamin D have hormone like functions Others such as Vitamin C and Vitamin E function as antioxidant The B complex Vitamins help enzymes in their work as catalysts in metabolism Vitamins are classified by their biological and chemical activity not their stucture Vitamins are by definition convertible to the active form of the Vitamin in the body.

5 Types of recognised Vitamins There are 13 recognised vitamins which are classified into two groups: Fat soluble vitamins Vitamin A Vitamin D Vitamin E Vitamin K Water soluble vitamins Vitamin B Series: B1, B2, B3, B5, B6, B7, B9, B12 Vitamin C

6 Fat soluble Vitamins Stored in the fat and liver tissues of the body Can stay in the body in reserves for days or even months Absorbed through the intestinal tract with the help of fats (lipids) Found in fatty foods; dairy, liver, greens and oily fish

7 Water soluble Vitamins Stored for short periods of time in the body, expelled in urine The body needs these vitamins more frequently than fat soluble vitamins Found in fruit, vegetables and grains

8 The Vitamin wheel

9 Vitamin deficiency The body should be able to get sufficient vitamins from a healthy diet and exposure to the sun. However many people are vitamin deficient and they tend to be categorised as: Older people aged 50+ Those in poor health Housebound Living in northern latitudes Having a poor diet Those with darker skin Pregnant/breastfeeding women

10 Vitamin demand is growing A market has grown for food fortification and vitamin supplements Vitamins are being added as functional ingredients in beverages New vitamin delivery systems being developed, e.g. nutritional bars and gummies

11 The rising demand for vitamins Vitamins have become an affordable and reliable insurance policy for those in need Consumer trend for preventative medication Aging population is increasing demand

12 Vitamin production overview Until the mid 1930 s (when the first commercial forms of VB complex and VC were made available) Vitamins could only be ingested through food intake Since the 1950 s Vitamins have been produced as speciality and then commodity chemicals and made widely available in multivitamin, dietary and food supplements

13 Vitamin production timeline First company to mass produce VC 1934 Roche Pfizer Start production of B1, B2, VC and Vitamin A Develop a synthetic Vitamin B Merck 1939 Roche Acquire 5 step VC production process from Reichstein Launch first onea-day multivitamin tablet 1949 Merck Isolate Vitamin B12 Develop 2 step VC production process USA & China Competing to engineer a 1 step VC process 1940 Bayer 1960 Chinese

14 Vitamin production history Once dominated by western producers; Roche, Takeda, BASF and Pliva The breakup of a price fixing cartel in 1999 caused price drops for many vitamins Several western producers then exited the market Market is now more open and competitive with producers in China and India having taken a large share of the market

15 Global Vitamin market sizes Global Production of Vitamins 300,000 mt (undiluted) Vitamin A 6000 MT global market (as 2.8 million iu) 2,000 MT USA (as 2.8 million iu) Vitamin C 135,000 MT global market 30,000 MT USA Vitamin E 80,000 MT global market (nat + synthetic ) 30,000 MT USA Vitamin B Series 80,000 MT global market 20,000 MT USA Vitamin D 90 MT global market (as 40 million iu) 30 MT USA Vitamin K 50 MT (as pure) global market 15 MT USA

16 Vitamin production natural or synthetic? Most Vitamin products are produced synthetically Even those Vitamins produced from natural raw materials cannot be described as natural as organic solvents are used in the production process There is a natural form of Vitamin E produced from soya bean, palm distillates

17 US Vitamin market overview Vitamins Retail level $12 billion Tabs Group Inc, Shelton, Connecticut Vitamins Wholesale level $1.5 billion Global Industry Analysts, CA

18 US wholesale Vitamin market sector breakdown Feed 70% Food & Beverage 15% Pharma/DS 15% Cosmetics Fastest growth

19 US wholesale vitamin market breakdown Vitamin A $550 million Vitmin B Series $265 million Vitamin C $150 million Vitamin D $80 million Vitamin E $450 million Vitamin K $10 million A, E, C account for 75% of total sales

20 Current Trends in the vitamin market Increasing demand for gummy vitamins The multivitamin is the cornerstone of consumer demand Vitamin C sales in beverages/juices are falling Growth of B vitamin supplements Vitamin D sales are growing as the positive health benefits are becoming known Vitamin sales in sachets/stickpacks are growing

21 Future trends in the Vitamin market Water soluble Vitamins growing at 2-3% pa globally but Asia will exhibit the strongest growth China VC market will grow from 20 to 40,000 MT in the next 5 years Market consolidation in China as we move out of the era of overproduction and loss making producers VC a monopoly that continues to lose money, how long can this last? Vitamin D will continue to grow Vitamin K2 looks to have a good future as its role in inhibiting arterial stiffness becomes more well known

22 Prinova s role in the Vitamin market

23 A logical extension of our supply chain 2010 acquired Vitamins Inc which took us into liquid blending of A D E and K 2012 constructed a purpose built dry Vitamin pre-mix facility in Chicago Team of experts in nutrient formulation and liquid and dry market forms

24 State-of-the-art blending facility Food Safety GFSI Certified Segregation and zoning control Full Traceability Flexibility Versatile processing and blending capabilities Liquid batch sizes from 10 to 400 Litres Dry blends from 1kg to 4,000kg Packaging in totes, super-sacks, bags in a box, or small subdivides

25 State-of-the-art blending facility

26 State-of-the-art blending facility

27 State-of-the-art powder processing capabilities

28 Vitamin summary Vitamins are essential for sustaining life Prinova can help customers to solve many challenges in how best to incorporate vitamins into their products Low cost vitamin ingredient input USA production of blends and D Vitamins Facility audited and approved by BRC Work with Prinova to allow us to help solve your vitamin related challenges!

29 Keep up to date with Prinova Visit us across the globe Ingredient Marketplace USA IFT USA FIBO Germany BodyPower UK SupplySide USA Vitafoods Switzerland Food Ingredients & Health Ingredients EU Subscribe to receive updates prinovaeurope.com/subscribe Market Report every other month

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